Archives for October 2019

Maui County will become the next municipality to file a climate liability suit against fossil fuel companies.

Mayor Michael Victorina on Tuesday said he intends to file suit against the companies to hold them accountable for climate impacts to Maui County, which includes four of Hawaii’s islands and more than 200 miles of coastline.

Hawaii is particularly vulnerable to climate impacts such as sea level rise, drought and wildfires, with those impacts already taking a catastrophic toll. Recent brush fires have burned 23,000 acres of Maui County, causing evacuations and the closure of the Kapalua Airport.

Sea level rise is already affecting public infrastructure, public and private property and harming Maui County’s economy. Projections of stronger and more frequent El Nino events and tropical cyclones will increase its vulnerability to coastal flooding erosion and other impacts of severe weather. Damage is expected to be in the millions.

The lawsuit will join more than a dozen others across the country, filed by cities, counties and one state (Rhode Island) to hold the fossil fuel industry accountable for the impacts of climate change. The municipalities have filed mostly under state laws, accusing the companies of knowing their products fueled global warming as they sold and marketed them for decades. They are seeking compensation for climate impacts that have already happened as well as adaptation costs to protect citizens and infrastructure.

“Much of the land designated for urban land uses will be adversely affected by sea level rise, so we need to plan for that now,” Victorino said, adding that the county expects climate change to impact on tourism, harbors, airports, infrastructure pump stations, water and sewer lines and roadways.

The suit, which will be filed pending the approval of the Maui County Council, is expected to target major fossil fuel companies, similar to suits filed by dozens of municipalities across the country.

“Fossil fuel companies could have taken steps to reduce damage or warn people about the danger from continued use of products that harm the environment. Instead, they’ve promoted and marketed their products and made billions in profits, all the while protecting their own assets from the damages they knew would occur,” Victorino said.

“They’ve undertaken a campaign to undermine their own science that predicted global warming and its devastating impacts. We can no longer allow fossil fuel companies to shift the cost of paying for the effects of sea level rise and climate change to our taxpayers.”

Exxon’s investment in the Canadian tar sands were far more at risk from climate change than the company had previously indicated, according to testimony and emails presented by the New York attorney general’s office Monday in the case against Exxon for climate fraud. The trial has now entered its second week in New York Supreme Court.

Testimony and emails showed that Exxon updated its greenhouse gas cost and applied it to the Canadian assets soon after. That update was made in its DataGuide, an internal planning document, shortly after the company’s greenhouse gas manager shared a presentation indicating the company had “implied” in its 2014Energy and Climate and Managing the Risks reports to shareholders that it used its proxy cost of carbon when evaluating investments. In fact, according to Exxon, it used a different number—the greenhouse gas cost—when evaluating investments.

The company contends the alignment of the two numbers was based on the world’s progress on climate change and its anticipation of a global agreement on the regulation of greenhouse gas emissions. But when it did that, the company did not announce the update to shareholders or issue a change or correction to its previous disclosure.

New York Attorney General Leticia James alleges that Exxon deceived investors and violated the state’s powerful Martin Act by using different sets of climate risk numbers for its own calculations and for shareholders.

Exxon doesn’t deny it used different numbers, but says it used what it refers to as its proxy cost of carbon to determine future energy demand and the separate greenhouse gas cost to evaluate investments. The oil giant says those are different calculations and maintains it has made accurate disclosures about the two numbers to investors.

The Martin Act does not require the NY AG to prove Exxon intended to mislead investors, just that they were misled.

The AG alleges that when the greenhouse gas cost was aligned and applied to evaluate investments, Exxon planners soon discovered the company’s Canadian oil sands assets, which at the time accounted for about 25 percent of its total resource base, were at a much greater risk from climate change than previously understood.

In western Canada, the risk was “very material,” according to an email sent by Jason Iwanika, development planner for Canadian-based Imperial Oil, to Guy Powell, Exxon’s greenhouse manager, in 2014. Exxon has a controlling interest in Imperial Oil.

“The new [greenhouse gas cost] has an impact on [certain oil sands] opportunities in the magnitude of [a] 0.5-1% [decrease in cash flow],” Iwanika wrote.

“This being significant certainly drew my attention and I wanted to get it right,” Iwanika testified.

The AG alleges that to hide the risk, Exxon did not apply the aligned greenhouse gas cost as outlined in the DataGuide, but instead applied the lower cost of existing regulations, thus making its oil sand assets—which are highly vulnerable to climate risk—appear more valuable than they would otherwise be.

Exxon has said the greenhouse gas cost listed in its DataGuide serves only as an estimation to be used when exact regulatory costs are unknown. It maintains that planners are encouraged to consult local experts and to use existing greenhouse gas emission-related legislation and policies when available.

The AG’s office presented the court with emails indicating Iwanika and others responsible for Exxon’s Canadian assets were concerned about the effects of the aligned greenhouse gas cost. Those emails requested guidance on how to best proceed in light of the resulting decrease in the value of company assets.

One email said when applied, the aligned greenhouse gas cost would “result in enough additional [operating expenses] to shorten asset life and reduce gross reserves.”

Another said it would “result in large write-downs” of Exxon’s Alberta assets. Yet another said proved reserves at its Cold Lake field was reduced by about 20 million barrels when calculated with the aligned greenhouse gas cost.

The AG’s office also presented documents created by Imperial Oil employee Susan Swan, an expert in Alberta’s greenhouse gas regulations, which included guidelines on the evaluation of the company’s Canadian assets based on then-current regulations. The AG said Exxon’s planners disregarded that guidance.

What Exxon did instead, was to use an “alternative methodology.” That method, which made the assets appear more valuable, failed to take into account potential future changes to those regulations, according the the AG.

“This projection may have been consistent with the regulations in place in 2015, but by assuming that those regulations would not grow more stringent over the next 50 years, it was inconsistent with the company’s public representations,”the AG wrote in court filings, referring to Exxon’s Kearl oil sands assets.

“In total, ExxonMobil applied an effective cost of less than $5 per ton of GHG emissions in 2040—approximately 94% less than the $80 per ton figure that ExxonMobil publicly represented for 2040 in that jurisdiction,” the AG wrote.

Iwanika testified that when the greenhouse gas cost was aligned, Exxon had already invested billions in Kearl. The AG presented documents indicating it the company had spent more than $300 million on its Aspen oil sands assets, also located in western Canada.

Emails show Iwanika and others at Imperial Oil continued to question the methodology through at least 2016.

“For the past few years there has been a lot of last minute recycle around GHG tax forecasts. Last year, after initial guidance to use the [ExxonMobil] corporate forecast (despite warnings it would result in large write-downs) we had to redo our calculations using legislated GHG taxes,”Imperial Oil’s Christina Stobart wrote. “This year I would like to get buy-in from the Houston reserves team to use legislated GHG taxes at the beginning of the process.”

The AG is arguing its case to Judge Barry Ostrager and when it concludes, Exxon will present its defense. The trial is expected to continue through Nov. 12 and Ostrager has said he intends to render a decision no more than 30 days after the trial ends.

A group of young Canadians is suing the federal government over climate change, an action that is part of a burgeoning global youth movement demanding climate justice through the courts.

The lawsuit, filed on behalf of 15 young people aged 10-19, mirrors the claims and demands of the landmark American youth climate case Juliana v. United States. The Canadian plaintiffs say their government, through its policies promoting fossil fuels, is infringing on their rights under the Canadian Charter of Rights and Freedoms and is violating the public trust doctrine. Like the Juliana plaintiffs, they demand a court order compelling the government to implement a science-based climate recovery plan.

The suit, La Rose et. al. v. Her Majesty the Queen, was filed Friday in the Federal Court of Canada. Plaintiffs are represented by Arvay Finlay and Tollefson Law Corporation, with additional support from Pacific Centre for Environmental Law and Litigation (CELL), David Suzuki Foundation and Our Children’s Trust, which is leading Juliana.

The complaint details specific harms the young Canadians, who hail from seven provinces and the Northwest Territories, are experiencing due to climate change. It alleges they constitute violations of the right to life, liberty, and security of the person under section 7 of the Charter. Another claim alleges violation of the right to equality under section 15 of the Charter, based on the fact that younger generations are disproportionately impacted by the climate crisis.

“Because of the climate crisis, and because of the government actions that makes this crisis worse, today we are not free to pursue our dreams,” 17-year-old plaintiff Albert Lalonde said at a press conference held in Vancouver on Friday. Lalonde and the other plaintiffs appeared before a youth climate strike with Swedish teenager Greta Thunberg, who has traveled to Western Canada to support the climate strike movement. The young people spoke about the climate-related dangers they already face such as extreme heat and wildfires and loss of cultural activities and heritage.

“The Canadian government cannot say they did not know about the danger we face,” Lalonde said. “We will hold our government accountable.”

The Canadian government, is facing increasing legal pressure to change course on climate action. Since Prime Minister Justin Trudeau took office, Canada has made little progress in reducing emissions and even purchased the troubled Trans Mountain Pipeline from Kinder Morgan.

In June, attorneys representing a group of young Canadians sent a legal demand letter to the government claiming that failure to consider the TMX pipeline’s contribution to climate change violates their constitutional rights. And last year, the Quebec environmental organization ENvironnement JEUnesse brought a class action climate lawsuit on behalf of all Quebec citizens under age 35 against the Canadian federal government. A court rejected the class-action in July but did recognize that the plaintiffs’ core claims, including violation of the Canadian Charter, were justiciable.

“Canada is one of the world’s largest emitters of greenhouse gas emissions and it’s time they are

held accountable for contributing to dangerous climate change,” said Andrea Rogers, staff attorney at Our Children’s Trust. “These brave youth join others, like the 21 plaintiffs in the ​Juliana v. United States ​case, who recognize that when governments take actions that harm and discriminate against them, they can vindicate their fundamental rights in a court of law.”